City of Milwaukee - File #: 060391

• File #: 060391
• Version: 0
• Type: Resolution
• Status: Passed
• File created: 7/12/2006
• In control: FINANCE & PERSONNEL COMMITTEE
• Final action: 7/31/2006
• Title: Resolution amending the Co-operation agreements between the City of Milwaukee and the Housing Authority of the City of Milwaukee, the Redevelopment Authority of the City of Milwaukee, the Milwaukee Economic Development Corporation, and the Neighborhood Improvement Development Corporation respectively, requiring these entities to furnish their annual audited financial statements to the City of Milwaukee no later than June 30th of each year.
• Sponsors: THE CHAIR
• Indexes: AUDITS, DEPARTMENT OF CITY DEVELOPMENT, HOUSING AUTHORITY, REDEVELOPMENT AUTHORITY

Date	Ver.	Action By	Action	Result	Tally
8/2/2006	0	MAYOR	SIGNED
7/31/2006	0	COMMON COUNCIL	ADOPTED	Pass	15:0
7/26/2006	0	FINANCE & PERSONNEL COMMITTEE	RECOMMENDED FOR ADOPTION	Pass	4:0
7/18/2006	0	FINANCE & PERSONNEL COMMITTEE	HEARING NOTICES SENT
7/13/2006	0	FINANCE & PERSONNEL COMMITTEE	REFERRED TO
7/12/2006	0	COMMON COUNCIL	ASSIGNED TO

Number

060391

Version

ORIGINAL

Reference

Sponsor

THE CHAIR

Title

Resolution amending the Co-operation agreements between the City of Milwaukee and the Housing Authority of the City of Milwaukee, the Redevelopment Authority of the City of Milwaukee, the Milwaukee Economic Development Corporation, and the Neighborhood Improvement Development Corporation respectively, requiring these entities to furnish their annual audited financial statements to the City of Milwaukee no later than June 30^th of each year.

Analysis

This resolution would require the Housing Authority of the City of Milwaukee (HACM), the Redevelopment Authority of the City of Milwaukee, (RACM) the Milwaukee Economic Development Corporation (MEDC), and the Neighborhood Improvement Development Corporation (NIDC) to provided audited financial statements to the Office of the Comptroller by June 30th of each year to ensure the City can issue its Comprehensive Annual Financial Report (CAFR) before July 31^st of each year.

Body

Whereas, The Government Accounting Standards Board (GASB) requires that component units must be included as part of a local government's financial reporting entity for a fair presentation of the government's overall financial operations.  A component unit is a legally separate organization for which the elected officials of the City are accountable based on appointment of governing board, fiscal dependence on the primary government, and if there is a potential that exclusion would result in misleading financial reporting; and

Whereas, The Housing Authority of the City of Milwaukee (HACM), the Redevelopment Authority of the City of Milwaukee (RACM), the Milwaukee Economic Development Corporation (MEDC), and the Neighborhood Improvement Development Corporation (NIDC) are component units of the City of Milwaukee; and

Whereas, Without audited financial statements from component units, the City's independent auditor will not issue an unqualified opinion that states the City's financial statements present fairly the financial position in conformity with General Acceptable Accounting Principles (GAAP); and

Whereas, The City's audited Comprehensive Annual Financial Report (CAFR) is an important financial document for bond rating agencies and the City's inability to timely issue its CAFR with an unqualified audit opinion could impact the City's bond ratings; and  

Whereas, The inability of the City to issues a timely Comprehensive Annual Financial Report (CAFR) in conformity with GAAP affects continuing the City's bonding without interruption or additional cost to the City; and

Whereas, State law requires municipalities file an audited annual financial report with the Department of Revenue by July 31st of each year or be penalized one percent of General Transportation Aids a day with a maximum penalty of ten percent.  The inability of the City of Milwaukee to meet this deadline would result in a penalty of about $240,000 a day up to $2.4 million annually; and  

Whereas, For the second year in a row the City's audited annual financial report filed with the State of Wisconsin will not be in conformity with GAAP due to unavailable audited financial statements from HACM, RACM, and NIDC; and  

Whereas, For the past four years, the City filed with the Department of Revenue an audited financial report on July 31^st and due to recent changes in auditing standards any delay in the availability of financial data beyond June 30^th would likely result in the City being unable to meet the State's financial reporting deadline and result in a possible loss of up to $2.4 million in transportation aids; and

Whereas, Without audited Component units financial statements received by the Office of the City Comptroller before June 30^th, the City Comptroller is unable to issue the City's, Comprehensive Annual Financial Report (CAFR) prior to the State July 31^st deadline, make available to bond rating agencies timely audited GAAP financial statements or provide up to date audited GAAP financial statements in bond document for debt sales; now, therefore, be it

Resolved, That Co-operation agreements between the City of Milwaukee and the Housing Authority of the City of Milwaukee, the Redevelopment Authority of the City of Milwaukee, the Milwaukee Economic Development Corporation, and the Neighborhood Improvement Development Corporation be amended to require these entities furnish their annual audited financial statements to the City of Milwaukee no later than June 30^th of each calendar year.

Requestor

Comptroller

Drafter

JME

Clerical edit -- August 24, 2006 -- jro